The Bernanke Code

Dear Congressman,

Every few months a bunch of high ranking bankers get together, swap war stories, and decide which direction to influence the money flow in this country, and subsequently the rest of the world. After they are finished with witticisms and martinis, they make some poor intern type up a press release to be sent out at exactly 2:15pm on the day the meeting has ended. The release is so cryptic that there are analysts who make a living out of simply intrepreting what it actually means. So, for your benefit and since the analysts are not unionized, I thought I would do this for you for free....

WASHINGTON - The Federal Open Market Committee released the following statement Wednesday after a two-day meeting.

Release Date: June 24, 2009

For immediate release

Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. “We heard a rumor that McDonald’s and Walmart might start hiring again.”

Conditions in financial markets have generally improved in recent months. “Pure fear has been replaced with plain old fashioned ulcer-generating anxiety.”

Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. "A couple of us had to fire our nannies."

Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. "The economic business cycle has locked up tighter than a Scientologist at a Billy Graham crusade."

Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability. "None of us had a freakin' clue what shoe is going to drop next."

The prices of energy and other commodities have risen of late. "We all compared our electric bills at the meeting. "

However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time. "We don't know what this means, but when the intern came up with it, we all liked the sound of it."

In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. "We all agreed to run up some balances on our credit cards and to haggle over everything we personally buy."

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. "Again, the intern suggested this sentence. Turns out this kid is pretty bright."

As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. "And since we are buying it from ourselves, we hopefully will get a good price!"

In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. "It was a toss up between Treasury securities by autumn, Muni Bonds by Pimco, Polo by Ralph Lauren, or Chanel #5 by Chanel, but Treasury securities has such a nice scent that we had to go with that one."

The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. "Again, we have no idea what we are doing."

The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted. "We finally remembered this time to bring the piggy bank to the meeting so someone could count the coins."